UPDATE: The game might not be as over as everyone thought last week.
Bloom.FM and its CEO, Oleg Fomenko, are working Twitter to whip up interest in a new investor/buyer for the torpedo’d British music service. Fomenko claimed that “more and more people approaching @bloomfm with expressions of interest. Really encouraged by this.”
In another tweet, Fomenko noted that over 20 potential investors have made some kind of overture.
The Bloom.FM music apps are still in operation for existing users, but the company is not taking new sign-ups.
British streaming-music service Bloom.fm abruptly went out of business yesterday after its primary investor withdrew funding, according to Bloom’s Tumblr blog announcement.
“We’ll keep this short because we’re pretty shell-shocked,” the post begins, and goes on to explain that Bloom’s investor, Russian broadcaster TNT, “unexpectedly pulled our funding.”
Bloom.fm had been operating for a little over one year, and had acquired 1.1-million registered users. The service offered free listening supported by commercials, and three monthly payment tiers between 1-10 British Pounds that removed ads and provided varying amounts of downloading.
British publication The Guardian quotes Oleg Fomenko, CEO of Bloom, for more context around the sudden investor abandonment. First, TNT has undergone a reorganization of some kind, which can be a pivot point for re-prioritizing investments.
Interestingly, Fomenko shared a perspective on the difficulty of growing a streaming business that requires up-front payments to music rights-holders for content. “”Underlying this decision is economics … margins are too low and up-front and growth costs are too high.” Fomenko believes that dramatic scaling of music services into mainstream consumerism can “allow for re-distribution of margins in the value chain.”
Fomenko also noted that most consumers are unwilling to pay subscription-music prices, and cited YouTube as an example of easily accessible free music. That comment is interesting given Bloom’s unusual experimenting with low, mid, and standard monthly pricing.
Bloom.fm made news a few weeks ago when Apple locked out Bloom’s commercials from its iAds platform, citing competition. Bloom spokespeople were reportedly delighted with the publicity generated by that action.